Let us Build your Financial Modeling Foundation
A professionally-built financial model that attracts investors has good assumptions, is flexible and adaptable, and easy to follow and understand. It allows management to make data-driven decisions, stakeholders to understand how the business performs in various scenarios, and investors to better understand the risks and rewards associated with your business as an investment.
- Proforma income statement, balance sheet, cash flow statement
- Fully integrated
- Good, better, best case scenarios for various assumptions
- Professionally-built and designed
Why do I need a professionally-built financial model?
- Investors heavily scrutinize your financial projections - a well-built model adds additional credibility to your estimates of future performance
- It provides your business with a road map - it is imperative to understand where your business is and where it is headed
- Flexibility and adaptability matter - a good financial model can be easily edited to reflect any change in your business
What makes a financial model great?
- Credible assumptions
- Flexibility and adaptability
- Offers key insights
What is a three-statement model?
A three statement model is a financial model that allows for an investor to quickly assess the potential of your business. It consists of three simple statements:
- a) Reality check (sales forecast)
- b) Sensitivity analysis (what ifs?)
- c) Valuation (present value NPV, exit strategy etc.)
The reality check looks at the past and projected sales, while the sensitivity analysis looks at different outcomes and how they would impact the business. The valuation section looks at what the business is worth today and what it could potentially be worth in the future. This type of model is essential for any entrepreneur looking to raise money from investors.
How do you balance a three-statement model?
In order to balance a three-statement model, you need to understand the different components that make it up. The reality check looks at the past and projected sales, while the sensitivity analysis looks at different outcomes and how they would impact the business. The valuation section looks at what the business is worth today and what it could potentially be worth in the future.
To balance the three statement model, you need to ensure that the sales forecast in the reality check matches the actual results and that the sensitivity analysis is realistic. The valuation section should also be accurate, based on real-world data. If any of these components are inaccurate, the whole model will be thrown off balance.
How long does it take to build a three-statement model?
It depends on the complexity of the model. A basic three statement model can be created in a few hours, while a more complex model could take several days to complete. It's important to get it right, so take the time necessary to ensure that all the data is accurate.